Stock Tips For Buying And Selling Stocks
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There are basically two types of risks involved with stock trading. The first type of risk is the market risk when the price of stocks falls along with the market crash. The other type of risk is the stock-specific risk where prices are affected only of stocks of a specific company. One should be really careful about these two risks while buying or selling stocks.
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Here are some stock tips for buying and selling stocks.
- Start trading with low shares: If you are beginner in the field of stock investment, it is advisable to start trading with low quantity of shares such as one hundred shares instead of taking a giant leap with one thousand shares. This is because as a novice in the field of stock trading, you might end up facing losses and in such a case, facing a loss with hundred shares is better than facing a loss of one thousand or more shares.
- Re-evaluate your existing stocks: It is essential to re-evaluate your existing stock and review the reason as to why you decided to invest in a particular stock. Do not sell the stocks but continue to hold them if those reasons are still valid in the present context.
- Know your exit points: It is important to know where your exit points in the stock trade must be, including your stop loss value.
- Prefer higher gap stocks: Also look for stocks that have a significantly higher gap (either up or down) at the open because they are more likely to have greater price swings. For instance, if a stock closed at $54 yesterday and opens at $58 today, then the stock has gapped up by $4.
- Prefer large range stocks: Watch out for stocks with large ranges because they give you better trading opportunities compared to stocks which only fluctuate by a few cents each day.
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